Manitoba Securities Commission Fraud Prevention

Alerts & Cautions

INVESTOR ALERT: USI-TECH

Posted: December 22 2017

FOR IMMEDIATE RELEASE

December 22, 2017

MSC warns Manitobans of Emirates-based
Bitcoin scheme

Winnipeg - The Manitoba Securities Commission (MSC) is issuing a
warning to Manitobans about USI-TECH – an Internet-based company billing itself
as an ‘automated Bitcoin and Forex trading platform.’ Evidence indicates the company, purportedly
operating from Dubai, UAE,may be operating a Bitcoin
investment scheme, which now involves more than twenty Winnipeg
residents.A Winnipeg man learned about USI-TECH while working in Abu Dhabi, UAE,
and personally invested $20,000 USD. He then began promoting it to local
investors on his return. The Manitoba investors were told to buy Bitcoin from
Coinbase—a San Francisco-based digital currency exchange—and then provide
Coinbase information to transfer the Bitcoin to USI-TECH. USI-TECH that allegedly
invests in an arbitragetrading strategy that purports to pay a one per cent return per day over a
140-day period. USI-TECH also purportedly pays a 10 to 35 per cent ‘referral
fee’ for bringing in new investors.

On the USI-TECH website (usitech-int.com), investors are promised no
up-front fees, and are free to register, but must provide €50 ($75 CAN) of ‘starting capital’. It also says you must pay a
‘one-time software licensing fee.’ The site promises “consistent returns of up
to 150 per cent per year,” and “minimal risk with maximised profits.” High
returns with little to no risk are common claims made in a financial fraud. The
website also contradicts its own overt claims with an obscure page called ‘Risk
Information’ stating, “Forex
and CFDs are leveraged products and involve a high level of risk. It is
possible to lose all your capital.”

“This model of recruiting has similar characteristics
of a multi-level marketing/Pyramid scheme,” says Jason Roy, senior investigator
with the MSC. “The individual who has come forward has convinced friends to
invest in USI-TECH, and has profited through recruitment fees. “Something many
people do not realize, is that actively soliciting others to participate in
this type of scheme is a violation of The
Securities Act,” says Roy, “meaning that your participation can leave you
open to sanctions—including serious financial penalties.”

In a Pyramid or Ponzi scheme, investors
are promised high returns. They operate by paying interest to ‘investors’ with
money brought in by new ‘investors.’ These new investors are attracted by
stories of people claiming to be getting high returns, and in some cases by
receiving small amounts of money back in the early stages of the scheme. These
schemes inevitably collapse, and investors lose money.

USI-TECH is not,
and has never been, registered to trade securities in Manitoba.

The British Columbia Securities Commission, The Financial and Consumer
Services Commission of New Brunswick, and the Texas State Securities Board have
issued similar warnings against USI-TECH in the last seven days.

Members of the public are advised to contact MSC if they are involved
with USI-TECH, or if they believe they have been targeted by any type of investment
fraud attempt. MSC’s anti-fraud line is 1-855-FRAUD-MB.

The public can
also visit recognizeinvestmentfraud.com for more information on common investment
frauds and scams.
The Manitoba
Securities Commission is a division of the Manitoba Financial Services Agency,
a Special Operating Agency of the Government of Manitoba that protects
investors and promotes fair and efficient capital markets throughout the
province.
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